 "Making a mark: GQG Partners EM Equity Fund a hit among US investors")
GQG Partners Emerging Markets (EM) Equity Fund has emerged as one of the most popular actively managed funds among US investors seeking to gain exposure to the Indian markets, with its assets under management (AUM) hitting the $20 trillion mark.
While the US-listed investment vehicle is not strictly an India-dedicated fund, the domestic equities account for over a third of its allocation (over 34 per cent) — by far the highest — followed by Brazil at 20.4 per cent. Investors in the US have been pouring money into funds that provide direct or indirect exposure to Indian equities owing to stellar returns generated by the domestic markets over the past year.
During the one-year period that ended March 2024, the MSCI India Index rose nearly 40 per cent, beating the S&P 500 index which rose about 30 per cent and the MSCI World Index which gained 25 per cent.
The GQG Partners EM Equity fund, which is managed by Rajiv Jain, clocked in returns of 28 per cent. With an AUM of $20.4 billion, the fund is currently one of the biggest in the active category with significant exposure to India. On the passive side, the popular US-listed India-dedicated funds are the Vanguard FTSE Emerging Markets Fund and the iShares MSCI India exchange-traded fund. According to Morningstar data, India-dedicated exchange-traded funds (ETFs) listed in the US have seen inflows in excess of $3 billion over the past 12 months.
Also Read
Market observers say GQG’s EM fund has outdone most of its peers because of bold investment calls and stock allocations. The fund’s India exposure is nearly double to that in the MSCI EM index, while its China allocation is only a fraction of its weight in the MSCI EM index. The call has worked very well for the boutique investment fund as the China index has declined 17 per cent over the past year.
In a media interaction earlier this year, GQG’s Portfolio Manager Brian Kersmanc highlighted how no country was more important than India to GQG's EM strategy.
"We have been increasingly disappointed with the recent policies implemented in the developed world, such as endless stimulus in both the US and Europe, regulatory crackdowns in China, and even nationalisation in France. In contrast, we believe India stands out with its move to become more pro-business," the asset manager said in a note published on its website last year.
India not only has prominence in GQG’s EM portfolio, it also has significant exposure in its international strategy, as well as global strategies, with China not even featuring in the top 10 in either.
Among domestic companies, ITC and Adani Enterprises are among its top 10 holdings in the EM portfolio. GQG’s Jain shot to fame after betting big on the Adani group stocks when they were worst hit by the allegations made by Hindenburg Research last year.
As of the March 2024 quarter, GQG stakes in Adani group firms were valued at over Rs 50,000 crore.
Over the past year, GQG has also bet on other Indian companies such as GMR Airports Infrastructure, IDFC First Bank, and Patanjali Foods. This week, GQG subscribed for Rs 1,345 crore worth of shares in the anchor category of beleaguered telecom operator Vodafone Idea’s Rs 18,000-crore follow-on share sale.